GOP alleges mismanaged $600 million

Published: Saturday, October 30, 1999

WASHINGTON {AP} The Education Department has a half-billion-dollar "slush fund" that could be used to offset proposed Republican budget spending cuts, said GOP lawmakers who called for a congressional investigation on Friday.

"An organization that has unauditable books clearly is ripe for finding 1 percent savings across the board," said Rep. Peter Hoekstra, R-Mich.

He has asked the General Accounting Office, the investigative arm of Congress, to determine whether the department has mismanaged at least $600 million and issued duplicate checks to grant winners.

"The agency is responsible for distributing $35 billion in education spending and it cannot determine where that money is going," added Hoekstra, who chairs the House Education and the Workforce investigations subcommittee.

Hoekstra and Reps. Bob Schaffer of Colorado and Matt Salmon of Arizona spent Friday morning at the Education Department. Arriving with less than a day's warning, they questioned Secretary Richard Riley and his deputies on an account the department maintains for grants that can't be awarded immediately for any of several reasons.

Rep. Steny Hoyer, D-Md., said subcommittee hearings about the department have found no corruption or mismanagement and blasted as "storm trooper tactics" the three Republicans' Friday visit on short notice.

Education Department officials say the Republicans' complaint is based on old numbers. Most of the $600 million Hoekstra questioned has since gone to the originating programs, and $147 million was returned to the federal Treasury. Under current law, the fund, now about $200 million, cannot be spent on anything else, Riley said.

The lawmakers had no specific examples of inappropriate ways the money may have been spent, citing the pending investigation. Hoekstra, who has grappled with Riley previously over department spending, added that the department was one of a several agencies that could not provide sufficient paperwork to the GAO to audit.

Hoekstra said his queries began about five weeks ago after department whistle-blowers pointed to internal documents that showed just $13 million of the $700 million in the grant-deposit fund in 1996 went toward reconciling rejected or unclaimed grants awarded for thousands of federal kindergarten-through-12th-grade programs.